Hardly three weeks since German Chancellor Angela Merkel rolled out the red carpet for Alexis Tsipras in Berlin, the Greek prime minister heads to Moscow on April 8 to meet Vladimir Putin, the Russian president.

Merkel had gone out of her way to improve ties with the Greek government. Relations had become poisoned because of the anti-German rhetoric used by Athens over World War II reparations that Greece alleged it was owed by Berlin.

Just when Berlin had hoped and thought that relations were on the mend, the Greek government announced on April 7 that it would be claiming more than €270 billion ($290 billion) in compensation from Germany. Sigmar Gabriel, Germany’s economy minister and vice-chancellor, described the demand as “stupid.”

The war reparations claim and Tsipras’s visit to Moscow may be attempts by Athens to play Russia off against the European Union—or rather, against Germany. But if Tsipras’s intention is to use his talks with Putin to exert leverage over eurozone countries to ease the conditions for extending financial assistance to Greece, his efforts could well backfire. Tsipras needs Merkel more than he needs Putin.

It is she who is Europe’s undisputed leader. It is she, and her Finance Minister Wolfgang Schäuble, who can influence the terms under which the other eurozone countries—via the so-called troika of the International Monetary Fund, the European Central Bank, and the European Commission—will extend more loan guarantees to Athens.

Greece also needs the EU more than it needs Russia, even though Greece has traditionally had very close ties with Russia. The EU is Greece’s largest trading partner. And for the period from 2014 to 2020, the EU allocated a total of up to €20 billion ($22 billion) in structural and investment funds to Greece. Can Russia match that?

Before the Ukraine crisis, some EU governments had considered that if Greece were to leave the EU, the union could weather that storm. They are mistaken. Despite the immense difficulties and frustrations in dealing with the Tsipras government, a Grexit would do untold damage to the credibility of the euro and of the EU.

Furthermore, Russia’s March 2014 annexation of Crimea and its invasion of eastern Ukraine have changed the parameters of Greece’s continuing financial and political crisis. The crisis has profound geostrategic implications that cannot be overestimated. The EU cannot afford a fractured bloc—something that the Kremlin would no doubt welcome.

Yet Tsipras and other EU leaders continue to court Russia. In almost all cases, apart from personal connections, it is energy that drives them to Moscow. Tsipras needs cheap energy, but also cheap loans and the chance to sell fruit and other produce again to Russia.

Russia slapped embargoes on certain EU food products in retaliation for the sanctions the EU imposed on Russia after its annexation of the Crimean Peninsula. Now, according to Greek and Russian press reports, Moscow might consider lifting its embargo of Greek produce. More importantly, Putin might also lower the price of gas exports to Greece. Were he to do so, he would simply confirm once again how the Kremlin uses energy as a political instrument.

This was clear on April 7 when the Greek, Serbian, Hungarian, and Macedonian foreign ministers, along with the Turkish European affairs minister, met in Budapest to discuss energy ties with Russia. There, they agreed to consider participating in plans by Russia to build a new pipeline that would bring gas from Russia via the Black Sea to a gas hub at the Turkish-Greek border.

“It is very important to find alternative solutions, like low-cost credit or competitiveness through cheap energy,” said Nikos Kotzias, the Greek foreign minister.

The Budapest meeting exposed the EU’s weak flank in Southeastern Europe. Putin was already given the red carpet treatment during his visits to Austria in June 2014, to Serbia (an EU candidate country) in October 2014, and to Hungary in February 2015. And don’t forget the trips to Moscow in March by the Cypriot president and the Italian prime minister.

Moscow’s actions may be part of a plan to weaken the EU’s resolve before leaders meet in June to consider whether to prolong the bloc’s sanctions on Russia. Merkel has repeatedly said the sanctions will remain in place until the February 2015 accord known as Minsk II, which set out the terms for a ceasefire in eastern Ukraine, is fully implemented.

So far, against all the odds and all the misgivings of Tsipras and other leaders over the sanctions, the EU has held together. Tsipras, at this stage, can hardly afford to break ranks, cheap promises of energy notwithstanding. But for how long can Merkel maintain that unity?

All that is too true.
But this situation is entirely dependent on a very old EU dilemma. Germany wants a strong EU, totally united in the foreign and security policy, as the next step after the euro. But Germany is still refusing to accept the logic precondition of all that: a genuine economic union, including the sharing of the national debts. It's something as to have not a simple house, but even a skyscraper without its very foundations. It's inevitable this building more high it is, more ready it is to the collapse.
There isn't any progress towards the "genuine economic union". Instead the only propsect is towards unity in foreign and even security policy, including a European common defense. The collapse is therefore approaching.

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Christian Schulz

April 09, 20151:32 am

"Germany wants a strong EU, totally united in the foreign and security policy, as the next step after the euro."
Some politicians may pay lip service to that but there is no real heartfelt support for any such undertaking within the german society.
"But Germany is still refusing to accept the logic precondition of all that: a genuine economic union, including the sharing of the national debts."
And this will not change since the overwhelming majority of germans rejects any liability for other states. And this includes myself. Period.

"Grexit would do untold damage to the credibility of the euro and of the EU."
I would argue that at this stage after threatening europe with Jihadist, Russia and morally blackmailing Germany, making concessions to Greece and keeping them in the EZ would even more damaging.
Greece has to go, infact it's the best solution for all parties concerned.

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Miguel

April 08, 20155:09 am

The Minsk agreements are mostly about Kiev commitments such as decentralization, constitutional reform etc. So according to the West position sanctions against Russia will stay if Kiev does not fulfill its obligations under Minsk. Iron logic...

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ambitious

April 08, 201511:45 pm

Dear Judy,
Game is still being played out and who will win/loose is to be seen. It is and will be very hard for Mrs Merkel to maintain united front notwithstanding her excellent track record. It is an emergency time in the land of EU. What can she offer? One of emergency measures is Mario Draghi current QE program which will flood European countries with liquidity. One just has to remember Mrs Merkel and Mr Schauble previous oposition to it. What has changed? War in Ukraine has irreversibly changed status quo and future direction of EU (and Russia for that matter) This is a most critical time for EU. Putin knows it and will try to play it to Russia's advantage. At the and of the day why not. Mr Cameron who is EU ally is using every opportunity to diminish EU credibility. Mrs Nuland who should be given a leading role in "House of Cards" has expressed her (USA) opinion about EU. To her credit she expressed it while having private conversation with US ambassador in Ukraine but still..... If that is how they treat "allies" one has to ask what do they think about perceived enemy countries? This is a probably beginning of some sort of hybrid cold war which is very different then previous one. There will be no winners but we all could be losers especially if some hot heads take it to seriously. Let's hope not.

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